The five fair reasons for dismissal revisited

Dawn Dickson and Martin Love formerly of Davidson Chalmers have now moved to Eversheds.

Sometimes it is an agenda like 'gone by Friday' but most follow the necessary procedures.
The number of tribunal claims in the UK are still showing significant drops. In the first quarter of 2015 41000, claims down 38% to 25,000 by second quarter. BUT Abolition of tribunal fees is still a possibility that would reverse this trend.

Â£12362 was the average tribunal award for unfair dismissal. Â£238,216 was the largest however. Management time is an additional cost and has a disruptive effect on the workforce. Reputational costs can impact as well.

Unfair dismissals in the press

Employee dismissed for giving abuse at a works Christmas party after excess drink was deemed to have been the employers fault since it is the employer's responsibility to monitor consumption at such events.
A sacked BBC technology chief won his case. Responsible for Â£100m project that went wrong. BBC keen to have a scapegoat but could have been settled for Â£50,000 when it went on to cost Â£498,000 because of the BBCs cavalier attitude.
Social worker wrongly blamed for man's death wrongly dismissed won case because of pre judging the situation.
Harrods worker loses Â£1m unfair dismissal claim after he was sacked for eating customer's unwanted cake. Customer returned cake and employee ate it and another is prove that there was nothing wrong with the product. Unsuccessful because there was more to it.
NHS whistleblower wins unfair dismissal case. Reported crammed wards and poor success rate in certain operations and brought this to attention of hospital trust but worker ended up ill because of bullying and hate. Award was Â£1.2m

Overview of unfair dismissal law

The legal test
Pick one of the following five
Unfair unless:
Potentially “fair” reasons –
Capability and Qualifications
Conduct
Redundancy
Breach of statutory duty or restriction
“SOSR”

“Substantially fair” – the employer acted reasonably in treating that reason as a sufficient reason for dismissal.
The employer must always follow a “Fair Procedure”.

In the event of a claim tribunal can only look at what is brought to it. If there is more than one reason prepare to be scrutinised on all the reasons.

Overview of unfair dismissal law
Who can claim?
– two years continuous service (unless employment law rights are not followed)
What is a dismissal?
Termination by employer
Fixed term contracts
Constructive dismissal

Remedies
– re engagement order
– re in statement order
– financial compensation (capped)
Basic award raised from Â£475 to Â£479 per week
Compensatory award is a year's pay.

Fair Reason 1
Capability and qualifications

Capabilities
– assessed by reference to an employee's “skill, aptitude, health or any other physical or mental quality”.
– capability dismissal two categories:-
* Poor performance (capability must relate to the job)
* Ill health

Qualifications
– dismissal relating to qualification if it relates to any “degree, diploma, technical or professional qualification” relevant to the employee's position[Tayside Council fair case when a mechanic failed to declare he did not have a driving licence.]– dismissal usually occurs
* soon after recruitment, where it emerges that employee does not have a necessary qualification
* employer requirements change
* loss of qualification during employment eg driving licence.

Performance
reasonableness of the decision to dismiss.
– knowledge of what was required
– did the employer take steps to minimise the risk of poor performance, was training / supervision / encouragement offered?
– achievable target set?
– proper appraisal?
– was the employee given the chance to improve?

Short term Ill-health: reasonableness of the decision to dismiss
– did the employer take medical advice?
– what are the prospects of a return to work?
– what effect does the absence have on the workforce?
– has the employee been consulted / warned?
– what is the employee's length of service?

Long term ill health: reasonableness of the decision to dismiss
– medical position
– consulted with employee?
– alternative employment offered (need a paper trial of evidence of consideration)
– how long can yo reasonably be expected to keep the job open – BS v Dundee City Council 2013: consider
* cost and availability of temporary cover
* whether employee has exhausted sick pay
* administrative costs incurred in keeping employee on books
* size of organisation
In the above case the employee was off for a full year but was deemed an unfair dismissal in first instance, reversed on appeal because is period of absence reasonable?

Fair Reason 2<
Conduct

Misconduct examples:
– disobeying reasonable instructions
– breach of contractual terms (including duties of good faith and mutual trust and confidence)
– theft or dishonesty
– violence at work
– alcohol or drug abuse
– breach of confidence, competing or preparing to compete

The Burchall test:-
At the time of dismissal the employer …..
– the employer genuinely believed the employee to be guilty of misconduct
– the employer had reasonable grounds for believing that the employee was guilty of misconduct
– had carried out as much investigation as was reasonable in the circumstances

Fairness of conduct dismissals – the Iceland test
– band of reasonable responses (standard set by the employer)
– consider
* length of service
* disciplinary record
* mitigating circumstances
* consistency with other cases

Misconduct v gross misconduct
– ordinary misconduct – dismissal on notice (usually only fair in cases of misconduct during the currency of a final written warning)
– gross misconduct – summary dismissal

ACAS Code of Practice on Disciplinary and Grievance Procedures:
– sets out recommendations as to the procedure employers should adopt prior to dismissing and employee for misconduct or poor performance
– the code must be taken into account by tribunals in deciding whether the employer acted reasonably

If you do not follow the ACAS guide case compensation can be increased by up to 25% and for example 25% increase when dismissed without notice.

Fair Reason 3
Redundancy

Dismissal must be wholly or mainly attributable to the employee:
– business closure
– workplace closure
– reduced requirement ( do not mention cost cutting exercise)

An employer will not normally have acted reasonably unless:
– it warns and consults with any affected employees ( or their representatives)
– adopts a fair basis to select for redundancy
– considers redeployment
– follows its constitutional or agreed procedures

Fair Reason 4
Breach of statutory duty or restriction

Dismissal is potentially fair …
– if the employee could not continue to work in the position held without either the employer or the employee contravening a duty or restriction imposed by or under any enactment
– employer must show that the employee's continued employment would actually contravene a statutory restriction. (NB reasonable belief is insufficient)

Examples:
– continued working would breach immigration rules
– loss of driving licence
– failure to obtain vocational qualifications
– discovery that the employee has a criminal record

Reasonableness of dismissal
– the extent of the statutory restriction and the extent to which it affects the employee's ability to do his/her job
– the duration of the statutory restriction
– the alternatives to dismissal eg adjustments to the job or alternative employment

Fair Reason 5
Some other substantial reason (SOSR)

There is no statutory guidance on the meaning but …
– .. designed to catch potentially fair dismissals that would not fall into any other categories.
– only necessary for the employer to establish a reason for dismissal which is of a kind that could justify the dismissal of the employee holding the job in question.
– once the employer shows that it had a potentially fair reason, the tribunal will look at whether the employer followed a fair procedure and whether the decision to dismiss for that reason was within the range of reasonable responses of a reasonable employer.

Examples of SOSR dismissals
– refusal to accept changes to terms and conditions (different overtime patterns)
– protection from competition
– personality clashes
– pressure from third parties (don't send this guy back to our company or you lose the business)
– reputational risk
– breakdown in trust and confidence
– SOSR is not a catch all by which any dismissal can be justified

SOSR
Before dismissal the tribunal may expect the employer to have …
– investigated
– consulted
– warned of the risk of dismissal
– given the employee the opportunity to state his/ her case
– explore alternatives
– balanced the needs of the employer and the employee[Show that some process has taken place to have a paper trail of procedures.]

Changes to terms …
– sound reason for the change? What were the motives? No need to show it was crucial, just more than trivial.
– Balancing act: reasonableness of dismissal against reasonableness of refusal to accept the change. Determined by the 'range of reasonable responses' test.
– Did you give reasonable warning of the changes? Were they clearly explained?
– Did you assess impact of changes on the staff? Consider alternatives?
– Did you consult? Try to get agreement?
– Did the majority of the staff accept the changes?

Personality clashes
– conflict must be causing substantial disruption to the business
– Difficult personality itself is not enough, it is the manifestation of that in behaviour to colleagues, students etc which is relevant.
– Did you seek to redeploy?
– Did you offer to change work patterns?
– Did you try mediation?

SOSR
Reputational risk …
– often arises in criminal activity outside of work situations
– central question: is it reasonable for you to discuss in the circumstances
– consider that dismissal in the absence of proven misconduct may do grave injustice to employee
– if acting on police information, do not accept uncritically but you are entitled to rely on police view that individual may pose an ongoing risk

Scenarios
Fair reasons to rely on and process to follow:
– Terry has to drive for work sometimes but has just lost licence
Capability, qualifications, statutory restriction, conduct (if fact was hidden)
– Donna. MD has lost trust and confidence in her
Loss of confidence = SOSR
– Louise moaned about her employer on Facebook
Conduct or SOSR reputational risk.
– Maxine's maternity leave cover/fixed term contract has come to an end
SOSR – end of contract
– John's line manager says he has poor customer feedback on John and that John is just not up to the job
Can dismiss on grounds of capability
– Paul won't accept the new working hours introduced to extend shop opening hours
Can dismiss on SOSR
– George has received a police caution following a complaint of assault from his wife. Word of this got out on social media
Can dismiss on SOSR
– Ringo was unhappy with his manager and then resigned
Personality clash, another SOSR but could be constructive dismissal